One year after the start of the COVID-19 pandemic, most small businesses in Canada are reeling. Tens of thousands have already become inactive, and many more are expected to shut their doors forever even as the economy returns to normal, crushed by debt accumulated during months of reduced revenues.
The federal rescue of Canada’s small entrepreneurs was slow and marred by significant after-the-fact adjustments, with Ottawa having to rejig both its wage subsidy and commercial rent assistance programs, says Dan Kelly, president and chief executive officer of the Canadian Federation of Independent Business (CFIB).
At the provincial level, the spectrum of government performance goes from B.C.’s New Democratic Party leadership, which employed minimal use of lockdowns and consistently communicated with the business community, to Ontario’s heavy-handed use of mandatory shut-downs that kept small businesses closed while allowing big-box stores to remain open, Kelly says.
Of the countless conversations Kelly has had with entrepreneurs across Canada over the past 12 months, many involved “business owners who are in tears because the whole nature of their business has been limited,” he says.
“Their business model didn’t work during a worldwide pandemic,” he says. “Once we put that behind us, their business model can work again.”
And yet, there have also been success stories.
To mark the one-year anniversary of the novel coronavirus pandemic, Global News spoke to three entrepreneurs in some of Canada’s hardest-hit industries about how they pivoted and found a way to survive and thrive during the health emergency.
What: A downtown cocktail bar where all drinks are inspired by books and named after book titles. The counter is made entirely of Scrabble tiles.
Before the pandemic: Unlike many bars, Famous Last Words usually does its best business in late winter and early spring, says owner Marlene Thorne.
“We’re kind of a cozy place. We’ve got a little fireplace. We’ve got little reading nooks all over,” she says.
March, in particular, is typically the busiest month of the year, with the bar hosting book clubs and corporate events in addition to a local crowd of loyal patrons, according to Thorne.
When the pandemic hit: “We went from being completely packed every weekend and some weeknights to it being an absolute ghost town,” Thorne says.
The bar usually had three or four staff working on a Saturday night, she says. The weekend before the pandemic, it was just Thorne and another employee, “and I sent the other person who was working home at 9:30 p.m. because there was just nobody,” she recalls.
Famous Last Words shut its doors in mid-March and for two months sat completely empty. The only source of revenue was the gift cards Thorne sold online.
The pivot: Thorne initially resisted the idea of offering cocktail classes online. She’d done that at the bar a few times and considered in-person interaction essential to the experience.
By May, though, she had turned around. By June she had found a format that would work on screen and had booked a few corporate classes.
A year after the start of the pandemic, Thorne has elevated Zoom cocktail classes to a refined art. The list of ingredients, which customers receive via email in advance, is “pretty small and approachable,” she says. Participants won’t need more than a set of measuring spoons and a jar with a tight-fitting lid to gauge quantities, mix and shake. And Thorne says she can now anticipate common mistakes — which usually involve under-squeezing their citrus or not shaking for quite long enough — and correct them in the moment.
The classes have proved hugely popular as corporate events, as companies look for remote team-building activities, she says.
Zoom-based Bachelor and Bachelorette parties, as well as birthdays and other family events, have also been a growing source of demand. And Thorne now also offers classes for individual patrons, who can sign up for $40 per screen.
“It’s a pretty affordable date night,” she says.
The classes aren’t enough to cover all the overhead costs of the brick and mortar business, but, along with federal and provincial government aid, have allowed Thorne to keep one employee on staff.
And Thorne’s online cocktail instruction has attracted customers well beyond the confines of Famous Last Words’ neighbourhood clientele.
“I did a class where most of the people were in Ireland. I’m doing one next week where everybody is sort of scattered all over the U.S. I’ve done them for people in Halifax and on the West Coast,” she says.
“That’s been a really fun kind of perk of this whole thing,” she adds. “The universe has really expanded for us and I hope to be able to keep that up.”
What: A consignment and rental styling boutique.
Before the pandemic: “We were a fairly busy business,” says owner and stylist Joyce Jebose. The plan for 2020 was to rely heavily on pop-up stores, festivals and markets to drive marketing and new customer acquisition, she says.
Joyce’s Closet was also getting ready to launch a kids’ consignment line.
When the pandemic hit: Revenues dropped by half overnight and stayed that way for three weeks, says Jebose.
“It was rough,” she recalls.
But the bounce-back, it turned out, would be just as quick.
The pivot: Joyce’s Closet already had a robust social media presence on Instagram and Facebook, with more than 50 per cent of business coming from international clients. But Jebose knew she would have to do things differently now that her entire business was going to move online.
The first change had to do with the way Jebose would display clothes and accessories online.
In pre-pandemic times, Jebose used to style the items on the floor when taking pictures she would post on social media. But with customers unable to check out the items in person, Jebose had her assistant model the clothes so customers could get a better sense of the fit.
She also expanded the store’s social media presence to Facebook groups, Facebook Marketplace, eBay, Depop and Etsy.
Demand picked up immediately and grew far beyond anything she could have imagined.
“There were days where we had 30 to 40 packages that we were shipping out,” says Jebose.
By the end of 2020, annual revenue was triple the $60,000 she’d made the previous year, she says. And Joyce Closet did not use a single dollar of government support.
And Jebose, who has two small children and is expecting a third, has no plans to slow down in 2021. The kids’ consignment line, she says, launched in mid-March.
What: A brick and mortar personal training business with 10 locations in B.C. and two in Toronto.
Before the pandemic: As it embarked on 2020, Innovative Fitness was celebrating 25 years in business, says CEO Curtis Christopherson.
When the pandemic hit: As he virtually huddled down with his team at the start of the lockdown in March, Christopherson judged his business would remain closed for six weeks at best and six months at worst. It was contemplating the latter, he says, and that prompted him to rush to develop remote personal fitness classes.
“We had 25 years of business client-based community culture that was all built up,” he says. “We would lose that over the course of six months.”
The pivot: While gyms and yoga studios across the country migrated to Zoom and other video-based platforms as the mandatory government shutdowns stretched from weeks to months in parts of the country, Innovative Fitness went one step further: it created its own virtual fitness class software.
It was lucky much of the work was already done. By early 2020, developers working for Innovative Fitness had already created a proprietary platform for scheduling and billing specifically devoted to the fitness-training business, after Christopherson says he couldn’t find good enough off-the-shelf solutions. When the pandemic hit, he asked the software team to add a video streaming service.
On March 30, Innovative Fitness delivered its first virtual training session, according to Christopherson. Within the first three weeks, the adoption rate across existing clients was between 30 and 40 per cent, he says. By the end of eight weeks, it had reached 70 per cent, he adds.
Even after Innovative Fitness physical locations reopened, enrollment in the online training services is remaining at around 30-35 per cent, he says.
In addition, the services have attracted customers from across North America, according to Christopherson.
“We picked up clients all in L.A., Chicago, Boston, New York, St. Louis and … across Canada as well,” he says.
Christopherson attributes the popularity of the services to the fact that one-on-one classes come with the “accountability” and customization that normally characterizes a personal training session — something that’s lost in pre-recorded online fitness courses or one-size-fits-all virtual group classes.
As sign-ups for the remote training sessions gathered steam, Christopherson says he began to think of the platform not as a placeholder for in-person training but a new type of fitness platform with global growth potential.
“We realized that we had found a niche,” he says.
Today, the fitness app — which soft-launched in February under the name WRKOUT — allows clients to access a global rolodex of fitness specialists. Users can find out trainers’ availability, schedule and pay for sessions all within the platform, Christopherson says.
“We opened up a global studio and we realized that this opportunity was much bigger than our brick and mortar business,” he says.